Re: How to Distribute revenue for a 13 month term over 12 month period to give a free period? ASC606

You can set up your rate plan charge to:Trigger Condition: Upon service activation dateEnd Date: Align to Subscription End DateBilling Period: Annual to charge the customer for 1 year for this rate plan chargeBilling Timing: In AdvanceBilling Day: Default from customer accountBilling Period Alignment: Align to Charge

You will then create the revenue rule to:Recognition Model: Billing - Daily recognition over timeRecognition Term Start Date: Invoice DateRecognition Term End Date: Subscription End DateRound TrailingDon't recognize revenue before the transaction occurs

You will create the subscription on the customer account:13 month termSelect the rate plan charge name you createdSave contract effective date as the start date of the Term For example: starts on 12/01/2017Service Activation date as 1 month after the contract effective date For example: starts on 01/01/2018

You will create the bill run for this customer:Invoice date = 12/01/2017 You want the invoice to show this dateTarget date= 01/01/2018 This is the beginning of the charge, this date will be the first date of the service period 01/01/2018-12/31/2018Since this is an Annual charge

Once the invoice is posted, you can then view the revenue schedule, which will show revenue distributed for the 13 month term from 12/01/217-12/31/2018 for the annual charge.

I have attached screenshots for each step so you can set this up in your sandbox to test this outInvoice

Revenue Schedule

Product Catalog Rate Plan Charge

Subscription added to customer account

Revenue Rule set up

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Re: How to Distribute revenue for a 13 month term over 12 month period to give a free period? ASC606

You can set up your rate plan charge to:Trigger Condition: Upon service activation dateEnd Date: Align to Subscription End DateBilling Period: Annual to charge the customer for 1 year for this rate plan chargeBilling Timing: In AdvanceBilling Day: Default from customer accountBilling Period Alignment: Align to Charge

You will then create the revenue rule to:Recognition Model: Billing - Daily recognition over timeRecognition Term Start Date: Invoice DateRecognition Term End Date: Subscription End DateRound TrailingDon't recognize revenue before the transaction occurs

You will create the subscription on the customer account:13 month termSelect the rate plan charge name you createdSave contract effective date as the start date of the Term For example: starts on 12/01/2017Service Activation date as 1 month after the contract effective date For example: starts on 01/01/2018

You will create the bill run for this customer:Invoice date = 12/01/2017 You want the invoice to show this dateTarget date= 01/01/2018 This is the beginning of the charge, this date will be the first date of the service period 01/01/2018-12/31/2018Since this is an Annual charge

Once the invoice is posted, you can then view the revenue schedule, which will show revenue distributed for the 13 month term from 12/01/217-12/31/2018 for the annual charge.

I have attached screenshots for each step so you can set this up in your sandbox to test this outInvoice

Revenue Schedule

Product Catalog Rate Plan Charge

Subscription added to customer account

Revenue Rule set up

If you found my answer helpful, please give me a kudo ↑ Help others find answers faster by accepting my post as a solution √

Re: How to Distribute revenue for a 13 month term over 12 month period to give a free period?

@monique how would this change for monthly recognition or is it possible? I see that you can only recognize monthly from the invoice item period start or end. I'm assuming I can mimick the same structure also for 2 free months etc.. ?

Re: How to Distribute revenue for a 13 month term over 12 month period to give a free period?

@monique would you be willing to set up a meeting to discuss this? I put a support ticket in some time ago and this wasn't able to be solved. I have a few questions around this and also how it works with zuora cpq etc.